History of banking

"[T]he is to the Agriculture, Commerce, and Finance of Great Britain a Sun; and the Circulation of so many Millions of its paper is the basis on which its convenience, property, and safety, have hitherto rested."

"Sir Francis Baring, "Sir Francis Baring's Observations on the Letter of Walter Boyd, Esq. to Mr. Pitt (1801) as quoted by Thomas Skinner Surr", The Present Critical State of the Country Developed; or, An Exhibition of the True Causes of the Calamitous Derangement of the Banking System, at the Present Alarming Crisis: Shewing the Essential Distinction between the Solidity of the National Bank of England and that of the Country Banks (1826) p. 7."

"In my former letter on the new collection of antiquities from Babylon, acquired by Mr. George Smith for the trustees of the , I referred to the great light we might expect to gain from them on the chronology of the late Babylonian and Persian empires. The tablets are the commercial papers or cheques and notes of a Babylonian banking firm, trading under the name of the founder Egibi. This firm appears from its close connection with the Court to have been a sort of national bank of Babylonia... The tablets give us a complete succession of annual transactions, from the first of Nabuchadnessar to the thirty-fifth of Darius. There is one tablet dated in the fourth year Nabu pal uzur, (Nabopalassar)... [W]e are enabled to fix the date... B.C. 625 as the first year of this monarch. From this date, for more than a century, this bank appears to have carried on its business regularly, but in the month Ab, [the eleventh month, or July of the Jewish people...] B.C. 516, the revolt of Aracus against Darius took place, the firm of Egibi were unable to transact any business owing to the revolt at Babylon, and the history of this remarkable bank cannot be traced any further."

"The bank of Venice is reputed the first in date in the history of modern Europe; but it did not become a bank, as we understand the term, till long after its foundation. Historians inform us that the republic being hard pressed for money, was obliged, upon three different occasions, in 1156, 1480, and 1510, to levy forced contributions upon the citizens, giving them in return perpetual annuities at certain rates per cent. The annuities due under the forced loan of 1156 were, however, finally extinguished in the 16th century; and the offices for the payment of the annuities due under the other two loans having been consolidated, eventually became the Bank of Venice. ...This establishment was ruined, after passing through many changes, by the invasion of the French in 1797. The origin of modern banking may be traced to the money-dealers of Florence, who were in high repute as receivers on deposit and lenders of money in the 14th century; and banking was indeed practised at Florence in the 13th if not in the 12th century."

"Money creation by private banks is a legacy of history. Banking started around the 15th, 16th century when goldsmiths started storing gold for their clients. To prove ownership customers received certificates which came to be used as a means of payment. Initially the goldsmiths gave out as many certificates as they had gold in stock, but they soon realized it was very unlikely that all customers would demand their gold at the same time. So they issued more certificates than they had gold in their vaults: money creation through private banking was born. For banks today the same applies as for goldsmiths at the time: if all customers demand their deposits at the same time—a so-called "bank run"—the bank will not be able to pay and will fail. And worse, depositors will loose their money."

"The use of banks has been the best method yet practised for the increase of money. banks have been long used in Italy, but as I am informed, the invention of them was owing to Sweedland. their money was copper, which was inconvenient, by reason of its weight and bulk; to remedy this inconveniency, a bank was set up where the money might be pledged, and credit given to the value, which past in payments and facilitate trade. The Dutch for the same reason set up the bank of Amsterdam. their money was silver, but their trade was so great as to find payments even in silver inconvenient. this bank like that of Sweedland, is a secure place, where merchants may give in money, and have credit to trade with. besides the convenience of easier and quicker payments, these banks save the expence of casheers, the expence of bags and carriage, losses by bad money, and the money is safer than in the merchants houses, for 'tis less lyable to fire or robbery, the necessary measures being taken to prevent them."

"Carthage... must have been a scene of wonderful grandeur and activity. The Carthaginians were luxurious, and prone to display their wealth. ...The riches of the temples were immense, and the furniture and embellishments of private dwellings were of the costliest kind. Distant isles of the Atlantic, as well as the nearer shores of Asia and of Europe, contributed to the teeming stores of Carthage. In [this] great African republic bank-notes had their origin. "In a small piece of leather," says Æschines, the Socratic philosopher, "is wrapped a substance of the size of a piece of four drachms; but what this substance is no one knows except the maker. After this it is sealed, and issued for circulation; and he who possesses the most of this is regarded as having the most money, and as being the wealthiest man. But if any one among us had ever so much he would be no richer than if he possessed a quantity of pebbles." Of course banks must have existed for the redemption of these leather promises to pay, and the issue and currency of such notes must have been provided for by law."

"[In Ancient Rome, 340 B.C.] The first care of the new consuls was to regulate the payment of debts, the only obstruction to a perfect union of the patricians and plebeians. They no longer considered the relief of debtors as a private affair, but as a general concern of the public; and therefore chose out five men of known probity, and great experience, to take an account of all the debts of the plebeians. These five were called bankers, and had the command of the public treasury to enable them to discharge their commission; which they did to the satisfaction of both parties. Those who, out of sloth and idleness, had plunged themselves into debt, either borrowed money of these bankers, giving the treasury security for it, or deposited the value of their debts in their creditors hands in effects, which were valued by the bankers. By this means the greatest part of the debtors were relieved, without doing injury to any person, and with little loss to the public. Tranquillity being thus established at home..."

"[U]pon the first day of the month Adar, proclamation was made throughout all Israel, that the people should provide themselves with half shekels, which were yearly paid towards the service of the temple, according to the commandment of God; On the 25th of Adar, they brought tables into the temple (that is, into the outward court, where the people stood) {Exodus xxx. 31.} On these lay the lesser coins, which were to provide those who wanted half-shekels for their offerings, or that wanted lesser pieces of money in payment for oxen, sheep, doves, &c. which stood there ready in the said court to be sold for sacrifices; but this supply and furnishing the people from the tables, was not without an exchange for other money or other things in lieu of money and that at an advantage [to the exchanger]: hence all those who sat at the tables were called bankers, or masters of the exchange."

"The first public institution in England partaking somewhat of the nature of a Bank was the Exchequer, founded by William the First: it still flourishes under Victoria, and, after an existence of eight hundred years its objects remain unchanged... The original name of the Exchequer was Scaccarium... not improbably derived from scaecus or scaccum, the "chess board," because a chequered cloth was used [by]... the accomptants of the English Court of Exchequer in counting the money inasmuch as the squares were understood to represent figures corresponding to the amounts placed thereon."

"Previous to, and immediately after the Norman Conquest, there was very little money in use in England: all obligations were discharged by personal service and by payments such as cattle, horses, dogs, hawks, &c. &c."

"Down to the period of Henry the First, the rents, taxes, and fines due to the King, were paid in provisions and necessaries for his household. Afterwards, in succeeding reigns, the revenues of the Crown were chiefly paid in gold and silver, but sometimes made up with horses, dogs, and birds for game: on some occasions an entire payment was made in horses and dogs singly, of which there are numerous instances to be met with in the ancient rolls of the Exchequer."

"A great portion of the yearly revenue consisted of fines, which were paid for grants of land and confirmations of liberties and franchises of various kinds. When the receivers of the public revenue lodged the money in the Exchequer, they received a discharge for the same, called a tally. Tallies were of great and constant use [and] coeval with the... Exchequer... The word tallies is originally French—taillie, cutting. ...The sum of money which it bore was cut in notches in the wood by the cutter of the tallies, and likewise written on both sides of it by the writer of the tallies. ...[O]ne was given to the parties paying money, and the other retained at the Exchequer. It is a mistake to suppose that tallies were a means of keeping accounts. On the contrary, they were official receipts for money paid into the King's Exchequer. ...[T]hey were undoubtedly an effectual protection against forgery or fraud."

"The holder of an Exchequer bill does in fact hold a mortgage on all the property, both movable and immovable, in the United Kingdom; a mortgage binding in law, but more binding still in the unbroken faith of the inhabitants of the United Kingdom. Exchequer bills are a species of Government paper money... simply orders upon the Exchequer, entitling the bearer to the sum specified therein, together with interest at a fixed rate per cent, per day, until a period is named for their payment, that period being at the option of the Government, but seldom exceeding twelve months..."

"In former times... the Exchequer was literally the bank of the Lord High Treasurer; but this was at a period when the existing facilities and securities for the transfer of money were... almost wholly unknown; when bank credits, bank cheques, and bank notes had no existence; and when the whole system of pecuniary intercourse was rude and imperfect: but since the establishment of the , the Exchequer has become rather an office of accounts and control than a repository for the safe custody of cash."

"While the Exchequer might be considered the royal Bank and Treasury, while the brotherhood of St. Thomas à Becket and the Merchants of the Steel Yard appeared in the double capacity of merchants proper and of the modern loan contractors, the business now carried on by our Rothschilds and Barings, of foreign bankers and dealers in foreign bills of exchange, was the subject of a royal monopoly."

"The private bankers of England of whom we have the earliest cognizance, were in a very different position from their successors of the present day. The first were Jews, aliens in blood and religion; contemned, hated, feared, and despised. In the land of their adoption they were very soon made the victims of more barbarous cruelties and oppressions than were ever inflicted upon any people whatever."

"The Jews were originally introduced into England by , and to them belongs the merit of benefiting commerce by that important improvement—the inventing bills of exchange. Their industry and frugality caused them to accumulate vast sums of money, which the idleness and profusion common to the English nobility in those days enabled them to lend out at a high rate of interest upon the security of property. They were the principal artificers of the time, and wrought most of the gold and silver ornaments for the use of the churches,which on many occasions they were afterwards called upon to take as pledges for the repayment of money lent to the priors and other ecclesiastics. ...[E]ach successive monarch extorted from them large sums of money, and that frequently by the most barbarous and cruel methods. ...[A]t the general massacre of the Jews at York... the gentry of the neighbourhood, who were all indebted to the Jews, ran to the cathedral, the place where their bonds were kept, and made a solemn bonfire of the papers before the altar. ...[M]any atrocities [were] committed by the people of England upon the Jews ...Richard the First, after the massacre... banished the remainder."

"John, experiencing an inconvenience in their absence, tempted them to return... Edward the First exceeded all his predecessors in atrocity. Fifteen thousand Jews were robbed of all they possessed, and then banished the kingdom. ...Some of the wealthiest of the Jews, having obtained the king's permission to take with them their property, loaded a ship with immense wealth and set sail; but when they had got to the mouth of the Thames the captain of the ship cast anchor, and... persuaded the Jews to leave the ship, and... he stole away from them, got on board, and set sail. ...The captain returned to the king, to whom he related the result of his scheme, and delivered up the treasure, receiving in return both honour and reward."

"After this event, no trace of the existence of the Jews in England can be found till long after the Reformation... [T]his oppressed people paid nearly one third of the whole revenue of the kingdom."

"The expulsion of the Jews created great inconvenience, as there were none either to lend money or manage foreign business. ...[T]he family of Causini... bankers in the principal cities of Italy [were] invited to England... In... time other settled in London, in the street known by their name, and famous... as the very centre and focus of monetary transactions extending... to all parts of the globe. The occupations of the Lombards, like those of the Jews, were those of the goldsmith, the pawnbroker, and the merchant; and finally that of the banker. They, too, amassed immense wealth, and had at one time in their hands an enormous amount of church revenues. [The Lombards] also accommodated the kings of England with loans of money... Each succeeding year wore away the distinctions between the Lombard goldsmith and the native Englishman; and centuries have passed since the acute Italians of the middle ages were absorbed..."

"In the simple state of money-dealing which prevailed in Italy during the fifteenth and sixteenth centuries, the treasure to be lent out at interest was commonly displayed on a table or board, called Banco, and hence the origin of the term [for] those immense establishments which circulate the wealth and promote the trade of modern Europe."

"Hence also the term bankrupt... for when the dealer in money in former times failed to meet the claims made upon him by his professional brethren, his table or board was publicly broken in pieces, and himself declared unworthy of credit. The stigma of bancorotto henceforth adhered to him, and he was accordingly driven out from the society of the still solvent usurers."

"[M]oneylenders among the ancients were distinguished by a similar name, derived too from a similar circumstance; viz. from the tables on which they were wont to expose their bullion, and which, like their successors... they took care to set forth in the most public places, even in the porches and the aisles of their sacred temples."

"As early as the fifth and sixth centuries of the Christian era the term bank is found in Italian history... But anterior to that by at least eight centuries, the term banker is used in connection with those functions of banking which relate to the adjustment of accounts between debtor and creditor, by public process and with the treasury of a nation as the source of financial supply."

"In... An Universal History from the Earliest Account of Time (London: T. Osborn, in Gray's Inn, I747, vol. xii., p. 48), it is recorded that in ancient Rome, B.C. 340, the republic appointed public bankers and placed the treasury of the nation at their disposal for the adjustment of debtors accounts."

"The origin of public banking as the term is at present understood is unknown. The dates generally admitted for the founding of the leading European banks are as follows: Bank of Venice, 1157, 1171, 1173; of Florence, 1260; of Barcelona, 1349; of St. George, Genoa, 1407; of Amsterdam, 1609; of Hamburg, 1619; of England, 1694; of France, 1800. ...[T]he Italians being credited with elaborating and completing the self-checking system of double-entry now in common use."

"Most of those transacting business with foreign ports not only dispatched cargoes of their home commodities, but received, as return freights, cargoes of foreign productions. They had, therefore, both debtors and creditors in the countries with which they traded. The mode of payment by assignments enabled them to satisfy the claims of the latter by making over to them the certificates of indebtedness received from the former, thus dispensing alike with the necessity of transmitting money and of employing the exchanger, except for the purpose of collecting any balance which might remain. Assignments of this kind were drawn up in the form of letters requesting the debtor to pay over the sum specified to another party named in the letter, on account of the writer; specifying also the time within which, and the forms under which, the payment was to be made. From this system of payments there came naturally, as a part of the regular business of banking, the early and the more modern and perfected form of bills of exchange."

"The clearing house was first established... in London in I773, and in 1775 occupied its building in Lombard Street. Its object was the ready and easy exchange of checks, drafts, bank-notes, and other evidences of indebtedness between banks. In May, 1864, the Bank of England joined it, since which time transfers and exchanges have been made without the intervention of bank-note or specie. The clearing-house and each banker using it has an account with the Bank of England, and the balances due at the close of the daily transactions are settled by the transfer of accounts on the books of that bank. The clearing-house in New York City—the first in the United States—was established Oct 1st, 1853, since which time the banking centres of each geographical section of the country have some bank of clearing for their own convenience."

"All historians agree that the was the first national or state institution of its kind of the modern ages. The causes of its creation are to be found in the history of the republic... the character of its people, its industries, and its commercial relations with other nations. Venice may properly be called the most ancient republic of modern times... The commerce of Venice had sought the most distant shores of the then known world before the first was elected, and historians assert that as early as the seventh century, the ports of Syria, the Archipelago, and the Black Sea were almost exclusively visited by the vessels of the republic. ...From the earliest times the doges appear to have had the right to coin money, and the oldest Venetian coins extant are of silver..."

"In A.D. 1122, a decree was issued by the Eastern emperor commanding all Venetians resident at Constantinople and other Greek ports, to quit the imperial dominions, and declaring the suspension of all intercourse between the two powers. The Venetians thus saw the most profitable branch of their commerce threatened with destruction, and during the two succeeding years they ravaged all the coasts of the empire with their fleets, capturing Rhodes, and sacking Andros, Samos, all the Ionian isles, and a portion of the Peloponnesus. There had been granted to the Venetians certain very important commercial privileges including that of having their commerce with Roumania held free from all taxation, their persons and property exempted from the jurisdiction of the Greek magistrates; and a street and section of the city of Constantinople was devoted exclusively to their residence and trade. ...[I]t was owing to the turbulence in this quarter and to the quarrel with their neighbors and rivals, "the ," in 1171, that the wrath of the emperor brought about the destructive war which followed, the great changes in the government of the Venetian republic, and the founding of its banking institution."

"A fresh revolt of the Venetians resulted in an order... by the emperor to confiscate all their property... and to seize and imprison their persons. The doge... issued orders... to depart immediately. ...The emperor, in return... letting loose a fleet and waging a destructive war upon all the dependencies of Venice. The Venetians were aroused as never before... and in one hundred days... [o]ne hundred and thirty fully armed vessels sailed under the command of Doge Vitale Michieli II. The fleet departed for Dalmatia. Trau and Ragusa were taken and well-nigh destroyed, and the fleet sailed for the Archipelago. When off Negropont they were met by the governor, who persuaded the doge to send ambassadors to the emperor. These Venetian envoys were... detained all winter in prolix negotiations. In the meantime a... plague broke out among the fleet at ... and in the spring of 1173 a miserable remnant... of only seventeen vessels, made its way back to Venice, carrying with it the seeds of the plague. ...The imported pestilence spread itself over the city, sparing neither sex, age, nor condition; the populace accused the doge of being the author of these calamities, and when he appeared before the infuriated multitude he was murdered on the steps of the ducal palace. But out of all this misery and disorder arose a new order... Changes were made in the character of the government, limiting the powers of the doge, and Sebastiano Ziani was elected and installed in the ducal palace."

"[H]eralded by such god-mothers as War, Pestilence, and Revolution, the first banking institution of the modern world found existence. The finances of the republic were exhausted by this series of calamities; the doge, in 1171 [or] 1157 [or] at both dates,—was obliged to have recourse to a forced loan, exacted from the most opulent citizens, each being required to contribute according to his ability. The new doge, finding the revenues of the state still further disordered, the income of the government inadequate to its demands, and an expensive war with Frederick Barbarossa on his hands, felt himself obliged to resort to the same measure."

"For these later loans, in 1173, the public revenues were mortgaged for the payment of the interest at four per cent, and a board of commissioners was instituted... called "the Chamber of Loans,"... to arrange for and pay the interest to the fund holders... and to supervise the transferring of the stock."

"Britain was at war alternately on two fronts—first with the American colonies... then with Napoleon... Money was needed... Pitt was relentless... in his demands on the Bank for loans. Though taxes were increased... the need continued. ...Bank reserves dwindled, and there were occasional runs. Finally, in 1797, under conditions of great tension... the Bank suspended the right of redemption of its notes and deposits in gold and silver. The principal immediate consequence... disappearance of gold and silver coins... People passed on the notes and kept the metal. ...The Bank hurriedly printed one- and two-pound notes, and it also redeemed from its vaults a store of plundered Spanish pieces of eight. ...The needs of the government continued... Loans and the resulting note issues continued to increase. ...so did prices and the price of gold. ...[I]n reflection of the distribution of power... the concern was focused not on the price of food but on the price of gold. In... 1810, the House of Commons impaneled a committee... The committee... found... an overissue of the still irredeemable... notes [and] proposed that, after a two year period, the Bank make its notes fully convertible into specie once again. Thus... there could be no increase in the price of metal. There followed in 1811 a famous debate on the nature of money and its management... In the debate... is a difference of opinion that continues to this day. Where does economic change originate? Does it begin with those [in the banks] who are responsible for money... who made the loans and thus caused the supply of notes... to increase. (From this... the stimulating effect of rising prices on production and trade.) Or does change begin with production? ...with consequent effect on the demand for loans and thence on the supply of money? In short, does money influence the economy or does money respond to the economy? The question is still asked."

"A greater danger to gold was war. The gold standard in the last century owed much to the intelligent management of the ... It owed much more to the British peace. In the next century warring governments would, as did that of Pitt, turn to their central banks for the money that they could not raise in taxes. And no bank, whatever its pretense to independence, would even think of resisting. Most dangerous of all would be democracy. The Bank of England was the instrument of a ruling class. Among the powers the Bank derived from the ruling class was that of inflicting hardship. It could lower prices and wages, increase unemployment. These were the correctives when gold was being lost; euphoria was excessive. Few or none foresaw that farmers and workers would one day have the power that would make governments unwilling to impose these hardships even in so righteous a cause as defense of the currency. However, it was early seen that the interests of the rich in these matters could differ from those of others. Writing in 1810, Ricardo [made that observation in a September 6 letter to the Morning Chronicle editor]... In England the triumph of Ricardo's monied class was complete or nearly so. In the United States, however, it was subject to the sharpest of challenges. In one form or another, this challenge was to dominate American politics for the first century and a half of the Republic. Only the politics of slavery would divide men more angrily than the politics of money."

"The banks... provided the money that financed the speculation that in each case preceded the crash. Those buying land, commodities or railroad stocks and bonds came to the banks for loans. As the resulting notes and deposits went into circulation, they paid for the speculative purchases of yet others. It helped that the banks were small and local and thus could believe what the speculators believed... that values would go up for ever. The banking system... was well designed to expand the supply of money as speculation required. Banks and money also contributed to the ensuing crash. A farther constant of all the panics was that banks failed. In the earlier panics the will-of-the-wisp enterprises... disappeared... Later in the century, the casualties continued, and still most heavily among the small state banks. ...After 1920, the real slaughter began, and, after 1929, it approached euthanasia. In the four years beginning in 1930, more than 9000 banks and bankers hit the dust. A bank failure is not an ordinary business misadventure. ...Owners lose their capital and depositors their deposits, and both therewith lose their ability to purchase ...But failure (or... fear of failure) also means a shrinkage in the money supply. ...A healthy bank is making loans and, in consequence, creating deposits that, in turn, are money. A bank that fears failure is contracting its loans and therewith its deposits. And one that has failed is liquidating its loans, and its frozen deposits are no longer money. The liquidation also draws on the reserves, loans, deposits and thus the money supply of other banks."

"As the new System was getting under way, the United States was moving into war. It is part of the favoring cliche that this was the Federal Reserve's first crisis and that it met it well. This is nonsense. The Reserve Banks bought government bonds and helped sell them as the Treasury required at the interest rates the Treasury specified. Peacetime loans to private individuals can be refused. Government loans in wartime cannot. When its rates are set and its purchases of government securities specified, a central bank has no independent power. The System began its life as a routine adjunct of the Treasury, a role that required no thought."

"The twelve district banks and their buildings survive as branch operations. Their mechanical tasks, notably the clearing of cheques, the routine movement of currency and the management of government financial transactions, are useful and vast. But the myth of the autonomy and importance also survives. A pamphlet published in 1971 by the Federal Reserve bank of Richmond, Virginia... shows the Board of Directors... deliberating... However... the text concedes the truth. The directors... do not establish dividends, control investment policy, supervise operations... (Nor... do they appoint officers or fix salaries.). They do establish, subject to the approval of the Board of Governors, the discount rates the Reserve Bank charges on loans to member banks. This is... the rediscount rate too is exclusively the domain of central authority. ...[O]nly one [function] remains that is categorical. The Directors... provide System officials with... "grass roots" information on business conditions. ...The textbooks, without exception, cooperate to sustain the regional myth. ...Perhaps there is something to be said for perpetuating legend, enhancing local pride... But truth and reality have their claims and these are that Aldrich's concession to the countryside was unworkable and has been undone these forty years."

"In ancient in the earliest times barley was the medium of exchange for most transactions. ...grain continued throughout these centuries to be the standard of payment and repayment. However, even before 3000 B.C., ingots of copper and silver were also exchanged. There were two standards of value: grain and silver. Silver was used mainly in the town economies... while grain was used in the country. There was no coined money until the first millenium B.C.; payments in metal were by weight."

"Many documents dealing with property and credit have come down to us from the Sumerian period. ...Many of the financial customs of the early Sumerian period were codified and perpetuated in the Babylonian ..."

"The temples not only owned great wealth but were active in finance. They granted loans of silver and loans of grain. Sometimes they made loans to the poor without interest and at other times they made loans at interest. Often they charged rates below the legal maximum: sometimes one half or one third... The Temple of at would lend money to slaves to enable them to purchase freedom. At Sippon, the Sun God, acting through priests and priestesses, was the chief banker. The temples were also seats of justice and depositories of documents and valuables. Such banking operations, including deposits, transfers, and loans, date back to the third millenium B.C., but did not lead to the creation of specialized professional banking firms until the n and Neo-Babylonian period."

"In the period 500-200 B.C. it was the custom in to designate the ownership of real estate by marking stones called "horoi," which meant limit or boundary. ...Certain of these gave notice that the property is encumbered, and a few say how, for how much due to whom, and on what terms. ...At about 450 B.C. the deme instructed its temple officials to obtain real security for all its loans and to place horoi on the encumbered property. ...The state itself was never mentioned in the horoi; public lending or borrowing was unusual. Groups of individuals, comprising lending clubs, often made... secured loans to friends, sometimes without interest. The horoi often refer to loan contracts on deposit with bankers or in temples."

"Loans to states were... exceptional until the third or second century B.C. ...The famous loans to the city of Athens during the fifth century B.C. were a religious fiction: the money was the war reserve of the people of Athens. Interest on these loans was nominal and was rarely paid. but an effort was made to return the principal to the Temple, that is to say, to restore the war reserve."

"The credit of most Greek states was in fact very poor. ...Often Greek states wishing to borrow had to offer the guarantee of individual citizens in good standing, who were called "foreloaners" or "underwriters." In 377-373 B.C., thirteen states borrowed from the Temple of , and only two proved completely faithful; in all, four fifths of the money was never repaid. Thereafter the temple preferred loans to individuals, secured by land."